India Moves to Take Custody of Accused Jeweler Who Fled to Britain

India Moves to Take Custody of Accused Jeweler Who Fled to BritainNEW DELHI — Nirav Modi, the jeweler whose designs adorned Hollywood stars but who fled India earlier this year amid accusations that he defrauded banks of $2 billion, has been located in Britain and is the subject of an extradition request, officials said on Monday.

Mr. Modi has been on the run since January as the nature of the bank fraud — the largest in India’s history — became public. Indian officials have accused Mr. Modi of working with tellers at a branch of a government-owned lender, Punjab National Bank, to obtain $1.8 billion from branches of other banks by issuing fraudulent letters of credit.

The accusations struck a nerve in India, where taxpayers have bailed out government-run banks numerous times and where farmers often commit suicide because of their inability to pay back loans worth just a few hundred dollars. The perception in much of the country, home to a third of the world’s poorest people, is that government lenders bankroll the lavish lifestyles of the elite.

Officials here have been at pains to paint a different picture, and on Monday they confirmed Indian authorities had requested that Britain send Mr. Modi back to India.

“We have been informed by Interpol in the U.K. that the subject is in the U.K.,” Abhishek Dayal, the spokesman for India’s Central Bureau of Investigation, the country’s main federal policing agency, said in an interview. “We are moving for his extradition.”

Mr. Modi’s whereabouts had been the subject of fevered speculation in the Indian press, with reports pointing to his being in a variety of locations, from London to Hong Kong. The jeweler’s lawyer, Vijay Aggarwal, said his client was innocent and that the fraud allegations stemmed from a misunderstanding over a $40 million loan.

Born in Antwerp to a diamond trading family, Mr. Modi branched out and launched his own line of jewelry. He first rose to international prominence in 2010, when he designed a necklace with a 12.29-carat diamond set that was auctioned by Christie’s in Hong Kong for $3.56 million, about $1 million more than its asking price.

The bidding war landed Mr. Modi on the cover of the Christie’s catalog; it was the first time an Indian had been featured on the front. Later that year, he formed his Nirav Modi brand and announced plans to open 100 stores around the world by 2025.

The brand reached New York City in 2015 when Mr. Modi opened his flagship store on Madison Avenue, a few blocks from the luxury giants Dior and Saks. The star-studded opening saw some of his high-powered clients, including the actress Naomi Watts, as well as Donald Trump Jr. and the model Coco Rocha, on the red carpet. The next year, Mr. Modi designed 100 carats’ worth of diamond jewelry that the actress Kate Winslet wore to the Oscars.

But Mr. Modi’s quick rise puzzled jewelers everywhere. They were surprised by how rapidly his jewelry line expanded and achieved name recognition, which they said typically takes time and major financial resources. As Mr. Modi took his brand from one few recognized to one that featured top models in global ad campaigns, seemingly overnight, many wondered how his operation was financed.

His troubles mirror those of another Indian businessman. Vijay Mallya, known as the King of Good Times, a former parliamentarian and airline and liquor magnate, fled to Britain after being accused of defrauding banks of some $1.4 billion. Many of the banks involved were state-owned; the lenders had been trying to recoup their money since 2016. Mr. Mallya has denied wrongdoing and remains in Britain, though Indian officials have requested his extradition as well.

India’s banks, mostly state-owned lenders, have been hurt by some $6.5 billion in fraudulent loans over the past two years, according to figures released by Parliament. Financial analysts say government-owned banks tend to be poorly regulated and run, with executives appointed for their political connections rather than their merit.